How Sarah Could Win

I haven't really talked about Sarah Palin in awhile as I have refused to be a part of the bizarre relationship she and the media have with one another. She pretends to hate them but needs them desperately...doing an excellent job of playing them any chance she gets. In return, most of the media talk about how stupid she is yet they still fall all over each other to cover her.

Honestly, it's pathetic. She's at the point right now where she can say whatever she wants and get away with it. The Paul Revere thing is an example. She says something factually wrong, the media go ape shit, her supporters foam at the mouth and accuse the media of asking her gotcha questions, and she becomes the headline.

Maher had an interesting take last night on how Sarah Palin could win the 2012 election. First, we have 40 percent of the country who would never vote for the president even if he personally saved them from drowning. One can see the validity of this statement by reading my comments section. Second, people tend to vote for who they dislike the least not who the like the best. In looking at Sarah's negatives, it would seem that people dislike her more. But figure in the economic situation coupled with the fact that she is hot and it could turn out to be her that they dislike the least. Finally, it sucks that is has come to this but anyone could get elected in this dumb fucking country.

That last one is a frustration but it really is true. If Sarah Palin were 300 pounds, had short hair, and was missing teeth, would she still be as popular? Would anyone even be listening? No, they wouldn't. We not dumb because we lack intelligence, although that is part of it. We are dumb because looks matter more than skill. Appearance and what is cool is more important than competence. That's the Michael Jordan Generation, though.

We don't give a shit about the steak. All we care about is the sizzle.

Explaining the Drop

Many people are scratching their heads at the latest violent crime figures. 2010 saw a 5.5 percent drop in violent crime and a 2.8 percent drop in property crimes. Most of the experts are puzzled as nearly all of them predicted that crime levels would go up due to tough economic times. But they didn't.

So why is crime down? I suppose gun rights folks will say it's because of the loosened gun laws around the country. And so many since Barack Obama has become president. I wonder how those people who ran out to buy guns after Election Day 2008 feel now. Are they still worried that he is going to take away their guns?

Others say the crime drop is related to increased enforcement of current laws as well as local police simply doing a better job. I think it is for another reason. This is purely opinion and based on no hard evidence whatsoever but I think it's because people in this country are just too fucking lazy to commit crimes. It's as simple as apathy.

After all, Americans have their X Box and Wii. Who wants to put the effort into a crime and lose valuable Facebook time? With literally millions of texts flying back and forth between our nation's young people, perpetrating a crime would cut in to their LOLs and OMGs. Besides, they won't need the money once they get their long term record deal or NBA contract, right? Once they win American Idol, The Voice, or get that winning lottery ticket, their financial future will be set. So why risk it all and break the law?

America's soft power doesn't simply work on an international scale. Domestically, it has made us soft as well. I've talked about the downside of this with the MJG. This the upside.

People can't be bothered to put down their remote and get off the couch to do...well...anything.

T-Paw's Plan

GOP candidate Tim Pawlenty has released his plan for saving the economy and, quite predictably, it adheres to conservative fiscal dogma. Let's take a look at a few of the points.

Eliminate capital gains tax, interest income tax, dividends tax and the estate tax.

We already have a problem with the cap gains tax and now he wants to eliminate it? Great. The wealthier people in this country already claim more of their income in cap gains since the rate is only 15 percent. This would shift even more of it under that protective umbrella and we'd lose even more revenue.

Cut business tax rate from 35 percent to 15 percent.

Well, as Notes From The Front has shown recently, they already pay less than zero so what does it really matter?

Privatize the Postal Service, Amtrak, Fannie Mae and Freddie Mac.

I'd actually go further on Fannie and Freddie...how about eliminating them entirely? I suppose privatizing them would accomplish the same goal. But privatizing Amtrak and the Post Office are not good ideas. With the former, one need only look to the deregulation of the airline industry to see how well privatization has gone. Find a pilot and ask them about the differences between today and when the government used to set the price. It's also amusing that the PO is now the right's favorite whipping boy. UPS and FedEx are both private companies and have the same crappy service issues that the post office has today.

Individual rates would be whittled to two tiers: 10 percent on income up to $50,000 ($100,000 for married couples), and 25 percent for "everything above that."

Well, you can forget about that 25 percent as most people in this tier will just put all their earnings in the newly minted 0 percent taxes on cap gains. But he does get closer to an idea that hasn't been floated out there in a while and that's the flat tax.

Suppose everyone was taxed at the same rate. For purposes of this demonstration, let's say 25 percent. And let's say that all the loopholes were removed so no matter what, 25 percent was what everyone paid. A person making 50K a year would pay $12, 500 dollars a year on federal income taxes. A person making 100K a year would pay $25,000 a year. Seems like everyone is paying their fair share, right? That's why it will never happen. We don't hear anything about the flat tax anymore from the right because they know they can game the system so they will always pay less.

So, how is Pawlenty selling all of this?

"If you can find a good or service on the Internet, then the federal government probably doesn't need to be doing it."

Huh. Well, I can find web sites that show me how to make explosives. Does that mean the army should stop making them? I can also find web sites that can teach me how to hack into other countries' computers that control their weapons and power systems. Or teach me how to spy on people. Should our government stop providing those services as well? Well, probably not since that falls under the "protecting us from bad guys" umbrella.

Once again, the overly simplistic approach to solving problem is laid bare. Personally, I'd rather have a president who understands the complexities of the world as opposed to someone who speaks awshucksian.

The real head scratcher to all of this is Pawlenty would roll back ALL federal regulation renewed by Congress. How he gets to this point after seeing the very clear causes of the collapse of 2008 is completely puzzling. Like many of my readers here, he must be cloaked in his Randian shield-impervious to the mere suggestion that governments can, in fact, sometimes improve market outcomes.

Like the socialist utopia, his eyes are filled with fantasies of a libertarian paradise where the people at Goldman Sachs, Morgan Stanley, and Wells Fargo would (gasp) never consider behaving like money grubbing whores. Even if they did, the magical power of the market would always allocate its resources efficiently, right? None of them would ever put the entire financial system at risk simply due to ambitious greed.

Geez, something like that has NEVER happened!

A Most Excellent Quote

From the same source as below...

"The fascists of the future will be called the "anti fascists" - - Winston G Churchill

Out of the mouths of babes...!

Paging Jonah Goldberg:)

A Most Excellent List

Apparently, we have Christian teenagers reading Notes From the Front. Should I be worried? Ah, maybe not.

One of them sent me an email with a link which contained this wonderful list.

102 Things NOT To Do If You Hate Taxes.

Nikto was recently taken to the mat for saying this:

It is a staple of conservative dogma that government can do no right.

Well, take at look at the list of 102 things and count how many you think are legitimate functions of government and are worthy of your tax dollars. I could only find two items on the list that should not be government funded (#74 and #75). Because of my bias against fish (the smell is simply disgusting) and animals (giant pain in the ass) I have to recuse myself from being able to think rationally about either of those expenditures. I'm completely fine with all the rest.

I'd say if you disagree with a majority of them, you pretty much fall in line with Nikto's statement.

Wiener's Weener

I wasn't going to let the whole Wiener storyline go without a remark but I saw an opportunity to use it as a teachable moment.

NOTE TO THE MEDIA: There people in this country living in tents and/or without health care. Do we really give a rat's ass about someone sending sexy photos of themselves over the internet?

The media has once again proven themselves to stare and drool at the bright shiny object-in this case Wiener's weener. Recall that the mass media is one of the five primary agencies of socialization and the one, I believe, has overrun the other four (family, school, peer group, community). Somehow, the union of puritanical hysteria and the corporate owned media have created a bastard of a child that feeds on insanity like this. For the life of me, I can't figure out why Chris Lee resigned after a shirtless photo of him came out. So fucking what??!!??

Can we please get over this ridiculous rigidity about sex? All it produces is a preponderance of attention paid to a whole bunch of shit that doesn't matter one wit. We have serious problems in this country and this is a serious fucking waste of time, people.

What do we have to do to stop giving a shit about this garbage? I submit that we stop watching, reading, or listening to it and let the sponsors of any media who report this shit that WE DON'T CARE.

Go Forth and Worship Thy Derivative

One of the notions that always perplexed me is the worship of wealthy people in this country. I really don't get how business leaders and Jesus are somehow cut from the same cloth. Considering what Christ said about rich people in the Bible, it makes no sense.

But even if you are part of the non religious right, the leaders of the private sector are to be revered in a god like way. Somehow, if someone is wealthy, they: a) are successful in business so b) they would be a great president.

Take Mitt Romney, for example. He is viewed as a success in business simply because he has always been rich. He is rich because of his father and his time in the business community was largely spent gutting companies and reselling them for profit. I've held George Romney up many times as an example of what success used to mean (eg refusing a bloated salary, more thought towards the workers) but that doesn't make his son someone who can turn the economy around...especially since his perception of success is based on what is systemically wrong with our country as a whole.

Donald Trump is another example. He is viewed as a success. He inherited money from his dad and then proceeded to lose it all...get it back again...lose it all...get it back again...does anyone know how much he is really worth?

The point of all of this (as Maher details quite eloquently in the final new rule below) is that being a businessman doesn't mean you will be a good president. The government is not "for profit"...especially the United States government. Kindly leave your foot licking of corporate leaders at the door and remember whose feet were being licked in September of 2008 after these "titans" nearly destroyed the world economy.

Yet Another One

Hmmm...I must be imagining this..it must be...a voice inside my head.

Adult Supervision Required

It is a staple of conservative dogma that government can do no right. Many conservatives denounced President Obama's decision to prevent GM and Chrysler from going bust and folding. Now both companies are on the mend and the US government is set to sell its stake in Chrysler to Fiat. Obama's decision saved thousands of American jobs, and was undeniably the right thing to do.

I have to admit that I, too, would have liked to stick it to Detroit for making giant gas guzzlers. They did so because such cars were immensely more profitable than fuel-efficient smaller cars. But the truth is, they were just making the kind of cars that Americans wanted, even though it was stupid and ultimately self-defeating.

A lot of the guys who were responsible for Detroit's problems were given the ax when the government bailed them out, unlike the bankers whose greed engineered the crash of 2008. And that's part of the problem: the banks still have had very little government oversight since the bailout. Notably, one of the first things many bankers did was give themselves huge bonuses.

The irony of the whole "government involvement in business is bad" mantra is that best economy in the world right now is China's. It's run by the Communist Party. If guys in private industry screw up bad enough (like the ones who put melamine in infant formula) the Chinese government will kill them. I'm sure some of us would like to see the heads of the bankers responsible for the crash of 2008 on pikes, but I'd be satisfied to see them in jail alongside Bernie Madoff. And that requires better laws and more vigorous regulation.

The problem is that the financial industry and Republicans in Congress are still doing everything they can to sabotage the relatively weak legislation that Obama did manage to get passed to take some control of the banks that screwed us over. If this sabotage succeeds, another crash will be soon in coming.

The last 10 years have shown us what a disaster lax government oversight of markets, energy production and food and product safety can mean. But the resurrections of GM and Chrysler have shown that government can do things right, when the right people make the right decisions.

The energy companies, Detroit and Wall Street have been acting like kids running loose in a candy store. The only problem is that when they gorge themselves on greed, the whole country winds up with a tummy ache.

Random Economic Thoughts For Friday

Economic bad news from a number of quarters today starting with the unemployment number going up to 9.1 percent. As expected, President Obama is getting all the blame for it. GOP front runner Mitt Romney says that the president is destroying our country and "we are only inches away from ceasing to be a free market economy." Here's why that is a load of shit. 

What I find amusing about all of this is these same people that are doing the blaming seem to forget that if he did more than he is doing then we would be slipping into a more centrally planned economy. There's not anything he can do about high gas prices or the tsunami in Japan, the two main reasons the job market is so weak, so why put the blame on him?

Simply put, people aren't spending money. Whether it's individuals or governments, no one is spending which means businesses aren't making money which means they aren't hiring. Public sector job losses are seeing the biggest hit with 28,000 job losses last month, the most since November of 2010. 18,000 of those jobs are in education.

The only good news out of all of this is that most economists think these are temporary setbacks. And I tend to look at reports like this with a grain of salt. These days, economic reports have the emotional balance of a 14 year old girl. One day, everything is amazing. The next, all is lost and we are drowning in a boiling pit of sewage.

Through all of this, we have the debt ceiling dithering. At this point, anything coming out of the mouths of the GOP is silly when you consider these 10 points.

1. Republican Leaders Agree U.S. Default Would Be a "Financial Disaster"
2. Ronald Reagan Tripled the National Debt
3. George W. Bush Doubled the National Debt
4. Republicans Voted Seven Times to Raise Debt Ceiling for President Bush
5. Federal Taxes Are Now at a 60 Year Low
6. Bush Tax Cuts Didn't Pay for Themselves or Spur "Job Creators"
7. Ryan Budget Delivers Another Tax Cut Windfall for Wealthy
8. Ryan Budget Will Require Raising Debt Ceiling - Repeatedly
9. Tax Cuts Drive the Next Decade of Debt
10. $3 Trillion Tab for Unfunded Wars Remains Unpaid

What about #5? Taxes are low and people still aren't spending their money. So the argument that taxes need to be cut more makes no sense. Corporate Taxes, as I demonstrated the other day, are in the negative in some cases. Yet they are still holding on to their cash. Why? Because of the evil gubmint? That makes no sense either. They have everything they want and no taxes.

Honestly, I'm not sure I have the answer. Part of it does have to do with the plutonomy we created but are people really that stupid to hoard cash when they know it will ultimately bring down the system they need to remain wealthy?

None of this makes any sense.

Sobering Statistics

"40 percent of the people in this country doesn't even pay taxes!!!!"

We here that quite a bit from people that regularly go into anaphylactic shock regarding taxes. I wonder if they know about this..

How Our Largest Corporations Made $170 Billion During Great Recession And Paid No Taxes

Twelve of the nations largest Fortune 500 companies, while making $170 billion in profits during the period of The Great Recession, paid an effective tax rate of negative 1.5%.

Yes, you read that correctly.

Not only have these twelve companies paid zero in taxes for the years 2008-2010, they actually received tax subsidies that added $62.4 billion to their bottom lines.

Perhaps I need to revise my view on corporate taxes.

The fact that our economy isn't really recovering make more sense now. It's not just the banks that are hoarding money and lending out very little. It's corporations like Exxon, Verizon, and Honeywell. And we wonder why our debt and deficit are so high. Anyone who has any significant amount of money isn't paying taxes.

Moreover, these numbers prove that the idea that companies will just "go offshore if we raise taxes" is sub moronic. They are paying no taxes and still going off shore.

I take comfort in the fact that Ungar is a kindred spirit.

Seriously, people, do we need an anvil to fall on our heads before we get it?

Even that won't work, Rick.

The Big Lie Crumbling?

The subject of the comparison regarding the right and Nazis has come up again in comments. How serendipitous then is this opinion piece from Walter Rodgers.

Let’s recall the herculean tasks Obama has already accomplished:

• He stabilized the worst economy since the Great Depression. Though unemployment remains stubborn, the stock market is basically back to where it was before the global economic meltdown. His stimulus bill kept America humming and saved hundreds of thousands of jobs, while his rescue of General Motors saved an industrial icon.
• His administration kept thousands of over-extended Americans from losing their homes by laboring mightily to forestall foreclosures.
• In spite of ferocious opposition, he passed long-overdue reforms of our health-care system that had eluded the reach of many past presidents.
• He signed into law a bold package of regulations to boost consumer protection and restrain Wall Street’s greed.
• He negotiated a historic nuclear-arms reduction treaty with Russia’s Dmitry Medvedev.

Forgetting these and other accomplishments, the public has regrettably bought into the corrosive and dishonest campaign to degrade Obama. Goebbels-style nihilism that rejects anything Obama does as odious remains a powerful narrative.

Add in killing bin Laden, repealing DADT, increased gun rights, increased security at the border, increased immigration arrests as well as a whole host of other things and any rational person would say he was a good president.

Sadly, we are not dealing with rational people.

Worth Several Trillion Words

Who Will You Honor Today?

I think I will start with my grandfather who served as a combat engineer in the Pacific from 1942-1945. He lived from 1916 to 2008 and saw the country change and evolve in a dramatic way. He had more integrity than any person I have ever known. I'm thinking about you today, Pop. You will always be with me!

Between a Rock and a...Rock

In so many ways, the Republican Party is fucked. As I have wondered previously, what are they good at? And why do people vote for them? They don't really have any solutions for the myriad of challenges our country faces and seem to only be capable of harnessing fear, hate and anger. A recent article demonstrates the problem is much deeper than that.

I've been thinking along the same lines myself since Election Day 2008. In essence, the Republican Party is in the same disaster state today as it was nearly three years ago. I may have been naive back then when I predicted their demise (I must remember to never forget about paranoia, racism, and greed) and certainly premature but honestly, I think their days are numbered.

While it's true that they did win elections in 2010 which resulted in them taking back the House, the only reason they did was because of the Tea Party. Take them out of the equation and the Democrats win every election. Put them into the equation and they primary candidates that aren't far enough right...candidates that can't win a general election because the country simply isn't that far right. This is why I say the Republicans are fucked.

This problem was illustrated quite clearly in the recent special election in NY-26. A Democratic victory in a district that has been largely a Republican stronghold for over 150 years. How did this happen? Blame Paul Ryan and his plan to privatize Medicare which further illustrates the fucked-ness of the GOP. Ryan's plan has now become a litmus test for conservatives. If you don't support it, your ass is going to be primaried by the only reason the GOP has a pulse...the Tea Party. Yet if you do support it, say goodbye to 70 percent of the voters. So, it's not really a rock and a hard place. It's a rock and a rock. Because the only way out of their dilemma is to admit that their party is, quite literally, over.

And we all know their track record on admitting defeat.

Still More Epic Success

Further proof that our government bailing out GM worked beyond expectations was seen in April's sales figures. In fact, all three automakers in Detroit showed faster growth than Toyota and other Japanese brands. High gas prices helped GM which sold more of its hybrid vehicles.

In April, GM sold 18 percent more vehicles than Ford. GM's market share through four months this year is 19.6 percent, up from 18.7 percent last year while Ford's market share has fallen to 16.2 percent from 16.7 percent. Toyota's share is 14.1 percent, from 15.4 percent a year ago.

In addition to all of this good news for GM, the company has begun to hire back thousands of employees that it laid off with plans for expansion on the horizon. Check out this video.



Listen to the stories of the people in this piece. Not only does this demonstrate the remarkable comeback of GM but it shows why we did it in the first place. People's lives would've been ruined in an industry with so many interlocking mechanisms, not to mention that GM (from a PR standpoint) is the United States, that ordinary bankruptcy would've been colossally devastating. Considering that GM's GNI/Revenues rank higher than several countries in the world, bailing them out was a very smart thing to do.

And we see every day that it was an epic success.

Apocalypse Not

Whew. Another apocalypse has been averted.

Harold Camping, who--the media must point out in every article about him--was once a civil engineer, predicted that on May 21st at 6:00 PM the world would be inundated by earthquakes, floods and all manner of calamities, and that all the faithful would be assumed bodily into heaven by the Rapture.

The Rapture apparently didn't happen. A couple days after the appointed date, Camping explained that May 21st was actually an "invisible judgment day" to separate the faithful from the non-faithful, and that God had given us more time to prepare for the actual physical apocalypse that will really-really-really-no-doubt-about-it take place on October 21st.

All in all, a pretty lame explanation. Did Camping suddenly find a footnote in Revelations about invisible apocalypses that he missed the first thousand times he read the bible?

A better and more honest explanation would have been that the Rapture did take place, and that Camping and all his followers were left behind because of their hubris. But alas, that was one Revelation not forthcoming.

People like Camping have been around forever. And suckers have flocked to them. This time thousands of people spent their hard-earned dollars paying for billboards around the world announcing the apocalypse. Camping's radio ministry has taken in millions of dollars of donations in the run up to the non-apocalypse. When asked whether he would give back those donations Camping said he didn't see any reason why he should. I guess incorrect apocalypse predictions are non-refundable.

Camping expressed the same level of confidence in his October 21st prediction as he did in his May 21st prediction, and no doubt in his 1994 prediction. The question is, why do people fall for guys like this? And continue to fall for his nonsense even after he's been proved wrong multiple times?

How is Camping any different than Jim Jones, David Koresh or Marshall Applewhite? (Applewhite was the founder of the Heaven's Gate cult, and one of the 39 of who committed suicide in 1997 so that they could be assumed into heaven by the spaceship trailing after comet Hale-Bopp.) Sure, Camping doesn't advocate suicide. But many of his followers are despondent and out a lot of money. Camping has ruined many lives.

Camping's not the only prophet to outlive Judgment Day. The Jehovah's Witnesses have prophesied Armageddon numerous times. When Doomsday failed to arrive in 1914 the Witnesses said that they had screwed up, and what had really happened was that Christ had just become King of Heaven. I guess God wanted to retire and take it easy once WWI started?

We can be sure that come October 22nd Camping will have yet another lame excuse for why the world didn't end. Maybe he'll kick the can down the road 40 days, or five months, or another year and give us another solid date. But more likely, he will say that his calculations were flawed. That you can't accurately sync the ancient Hebrew lunar calendar and modern Gregorian solar calendar. That his leap months and leap days got messed up. That it's impossible to affix an actual date to Noah's flood. In the end, he will say that he doesn't know exactly when Armageddon will come, only that it'll be "soon" and only God can know the true date.

If it was just Camping and his brand of nuttiness, that would be one thing. But it's not. A large segment of the American population believes that the End Times are near. Many Republicans believe the founding of the modern Jewish state heralds the second coming of Christ and the destruction of the world as we know it. That's not just an odd quirk of faith.

These beliefs cause us to make foreign policy decisions in the Middle East that are not in the best interests of the United States, but instead further a misguided religious agenda. Believing that the world will end soon lets you ignore serious problems like global warming, environmental degradation, overpopulation, and declining natural resources. Because if God will kill all the non-believers and repopulate the cleansed earth with the newly resurrected Chosen Few, you don't need to worry about running out of oil, or poisoning our water supplies with toxic fracking compounds.

The thing is, people have always thought the world would end any day now. In some Christian teachings the world was originally supposed to end at the millennium. The first millennium, 1011 years ago. And you can be damned sure they thought the world was ending when the Black Death killed half the population of Europe in the 14th century. But, inexplicably, here we are, centuries later, still kicking.

Really, what's the difference between modern-day prophets like Camping and L. Ron Hubbard and relatively recent -- and still controversial -- religious figures like the Jehovah's Witnesses' Charles Taze Russell and the Mormons' Joseph Smith? And what's the difference between guys like Russell and Smith and venerated figures such as Mohammed, the writer of Revelations, Jesus, Siddhartha Gautama and Moses?

Between 1400 and 3000 years, give or take a few centuries.

Picking On Liz

I suppose it was inevitable that Elizabeth Warren, the defacto head of the new consumer protection agency in the government, would get attacked by Republicans. What I'm trying to figure out is why. Since I know many of you hate her immediately and the very idea of the CPFB, I am curious as to what I know will be your firm and unyielding convictions.

Now, I am already aware that some of you feel that she is going to come to your homes, take away your guns, and forcibly take the fruits of your labors to fund brown shirt factories and reeducation camps. No need to go over that point. What is perplexing me is this: after all that has come out about the massive amount of fraud that led directly to the 2008 financial crisis, why would you not want the government to regulate these guys? More importantly, why on earth would you vote for a republican (nose holding or not) like Patrick McHenry who seeks to continue this fraud? It makes no sense to me whatsoever.

The whole point of the CPFB is to streamline the regulatory process. It's the first step in undoing the Wall Street government that we currently have. It has to happen because we can't keep going through this cycle every few years. This is the global economy we are talking about not a fucking casino.

Stopping the Next Bubble

Over the last couple of months my colleague has been writing about why the rich are different. That is, how they can make money in ways that are impossible for mere mortals based on their connections and preexisting -- often inherited -- wealth.

In a recent column, Joe Nocera gives a great example of one of those ways that Mark mentioned: stock IPOs. Nocera wrote about LinkedIn's recent IPO:

[LinkedIn] had hired Morgan Stanley and Bank of America’s Merrill Lynch division to manage the I.P.O. process. After gauging market demand — which is what they’re paid to do — the investment bankers priced the shares at $45. The 7.84 million shares it sold raised $352 million for the company. For this, the bankers were paid 7 percent of the deal as their fee.

For a small company with less than $16 million in profits last year, $352 million in the bank sounds pretty wonderful, doesn’t it? But it really wasn’t wonderful at all. When LinkedIn’s shares started trading on the New York Stock Exchange, they opened not at $45, or anywhere near it. The opening price was $83 a share, some 84 percent higher than the I.P.O. price. By the time the clock had struck noon, the stock had vaulted to more than $120 a share, before settling down to $94.25 at the market’s close. The first-day gain was close to 110 percent.

Who was able to buy those shares at $45 and immediately turn around and sell them at $120? The rich and the powerful favored customers of Morgan Stanley and Merrill Lynch. If you had $10,000 or $20,000 you wanted to invest in a block of LinkedIn stock you would have been out of luck--those brokers won't even consider giving you access to an IPO.

They actually have rules that supposedly protect small investors with insufficient assets from participating in such offerings because they are "risky." I know this because my wife and I have been in on IPOs in the past, and we had to be vetted in order to participate. It's all about who you know and how much money you spend with the broker.

This really calls into question the purpose and even the utility of the stock market. Ostensibly stock exists in order for companies to attract investors so that they can get money to grow their business and recoup their original investment costs.

But LinkedIn didn't make anywhere near as much money as some of the people who bought their stock for $45 and immediately flipped it, some for as much as three times what they paid for it. The people who do all the actual work are getting stiffed.

Once a share is sold the company never sees another nickel from it. Too often shareholders are only interested in driving the price up so that they can sell it: they don't give a whit about what the company is doing, or whether it is really viable. Shareholders often demand CEOs do things just to raise the stock price, even though they harm the ability of the company to do its work (like the ever-popular ritual laying off the employees). They just want to cash out as soon as possible to flip the next IPO.

For that reason stock market profits should be taxed at regular rates -- not the ultra-low capital gains rate -- unless you're selling IPO stock more than a year after you bought it. Buying stock from someone who just bought it from another guy is not a real investment--it's just flipping. However, income from dividends and bond interest really are investments and should get long-term capital gains treatment.

The worst thing about the LinkedIn deal is that this kind of stock trading causes bubbles, like the tech bubble that burst in the late nineties. Is LinkedIn stock worth anywhere near $94 or $120 a share? Of course not. Just like Yahoo was never worth what people paid for it, and most of the other tech stocks that traders ran the price up on in order to flip them. Google is another stock that's overvalued, but Google at least has some substance behind all the hype: its search engine business is legit and the Android operating system has become the foundation for millions of cell phones and tablets.

These days the bulk of stock trades are made by computers that make decisions based on minuscule fluctuations on the scale of microseconds. This computer trading was the cause of last year's flash crash.

Computer trading has a lot in common with the "quantitative analysis" that brought us the credit default swaps and other crazy investment vehicles that tanked the economy in 2008. These schemes use mathematics and computer programming to take responsibility, human decision making and common sense out of the equation in order to make money ever faster out of thin air.

That's why a transaction fee should be levied on every stock trade. Republicans in Congress are complaining about high taxes and are threatening to cut funding to the very regulatory agencies that should have stopped the banks' foolhardy investment vehicles. These agencies were already understaffed during the Bush administration; cutting back on them now would be a colossal error.

A transaction fee would be the best way to put the expense of regulation on the companies that are most likely to cause the next crash, as well as put a damper on the riskiest and most egregious financial transactions.

High-speed computer trading has the potential to bring the entire world economy crashing down in an outright depression. This is one technological innovation best nipped in the bud before it gets out of control.

Out Of The Mouths Of Babes...

I have found quite a few of your statements regarding the Constitution of the United States, the quality of public school education and general U.S. civics matters to be factually incorrect, inaccurately applied or grossly distorted.

The above statement is a perfect illustration of why I no longer post on Kevin Baker's site nor (for the most part) engage people who seek to have their paranoid fantasies legitimized. Kevin, along with his merry band of sycophants, are completely and utterly defined by the statement above. The fact that it was made by a tenth grade girl in a letter addressed to Congresswoman Michele Bachmann makes it terribly ironic considering Kevin's one note samba about our nation's schools.

Sadly, though, where Amy Myers (the author of the statement above) has failed in her educational pursuits is what the people who she is criticizing are capable of doing. Take a look at this.

"A lot of them are calling me a whore," 16-year-old Amy Myers said, referring to anonymous comments reacting to online news reports about her challenge to the 55-year-old Minnesota congresswoman.

Amy and Wayne Myers said the comments on conservative websites alarmed them most. Several commenters threatened to publish the Myers' home address.

Others threatened violence, including rape, they said.

"I got a call from the principal that the main office received threatening mail," said the computer programmer and single father.

I wish I could say I'm surprised but I'm not. This is the place you go to when you are a True Believer. Amy, like many students across the country, represent what the right fears the most: critical thinkers. She needs to understand that they will react like this because it threatens their continued relevancy. This is why the drumbeat from the right has continually been that education is filled with socialists/communists/fascists that want to brainwash our children (B to the W-I wonder if any of them can tell the difference any more between the three).

Because the truth is that the right is attempting to do their own version of brainwashing which naturally leads them to the perception bias that current educators are doing the same. Further (and Kevin is fantastic example of this), they never stop to think and reflect that maybe many children like Amy won't listen to their warped view of history, civics, and education because it's simply "factually incorrect, inaccurately applied, or grossly distorted." Why are they incapable of seeing this? Because when you strip all the paranoia, hate, and anger away all the only conviction they truly have is their own vanity.

I hope that Amy realizes all of this as she moves forward in her life. Although being a confident and intelligent student of history, she need only look at the threats of intimidation and violence that occurred in Germany in the 1920s and 1930s for insight as to what happens when you challenge the Tea Party "goddess" (also ironic when you consider the cries about Obama's brown shirts but that's just another example of perception bias again).

Oh, and no response as of yet from Congresswoman Bachmann's office as to whether or not she will accept Amy's challenge.